Discounted Cash Flow Calculation for WBAG:FR using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
WBAG:FR DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Valeo's share price is below the future cash flow value, and at a moderate discount (> 20%).
Valeo's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Valeo's earnings available for a low price, and how does
this compare to other companies in the same industry?
Valeo's earnings are expected to grow by 17% yearly, however this is not considered high growth (20% yearly).
Valeo's revenue is expected to grow by 4.4% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Valeo's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
1/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Jacques Aschenbroich has been the Chairman at Valeo SA since February 18, 2016 and also its Chief Executive Officer since March 20, 2009. Mr. Aschenbroich served as the Chief Executive Officer and President at Saint-Gobain Corporation since September 18, 2007. He served as Head of Innovation and Research and Development activities at Saint-Gobain Corporation. He served several posts in the French administration and was in the cabinet of the Prime Minister in 1987 and 1988. He served as President of High-Performance Materials Sector, Senior Vice-President and General Delegate to North America of Compagnie de Saint-Gobain. He served as President of Flat Glass Division and Chief Executive Officer of Compagnie de Saint-Gobain since September 18, 2007 and served as its General Delegate to United States & Canada. He joined Saint-Gobain in 1988 and has held a number of high-level management posts. Mr. Aschenbroich served as Deputy Chief Executive Officer of the Compagnie de Saint-Gobain until December 2008. He served as Co-Chairman of Hankuk Glass Industries Inc. He served as Chairman of Grindwell Norton Ltd. until December 31, 2008. He has been Director of BNP Paribas SA since May 3, 2017. He serves as a Director of Van Gansewinkel Environmental Services Belgium NV. He has been an Independent Director of Veolia Environnement S.A. since May 16, 2012. He has been a Director of Valeo S.A. since March 20, 2009. He served as a Director of Hankuk Glass Industries Inc.; Saint-Gobain Glass France S.A. and Esso S.A.F. He served as an Additional Director of Grindwell Norton Ltd. from December 13, 2006 to December 31, 2008. Mr. Aschenbroich is an engineering graduate of the École des mines.
Jacques's compensation has been consistent with company performance over the past year.
Insufficient data for Jacques to establish whether their remuneration is reasonable compared to companies of similar size in .
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Valeo management team is over 5 years, this suggests they are a seasoned and experienced team.
Chairman & CEO
Chief Financial Officer
Chief Operating Officer
Investor Relations Director
Chief Ethics & Compliance Officer
Fabienne de Brébisson
Vice President of Communications
Senior Vice-President of Sales & Development
Senior Vice-President of Human Resources
President of Valeo Service Activity
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Valeo board of directors is about average.
Valeo SA designs, produces, and sells components, integrated systems, and modules for the automotive sector worldwide. The company operates through four segments: Comfort & Driving Assistance Systems, Powertrain Systems, Thermal Systems, and Visibility Systems. It offers parking and driving assistance products, such as ultrasonic sensors, radars, and cameras to detect obstacles around vehicles; intuitive control products; and a range of connectivity solutions from short-range to long-range connectivity, as well as develops systems that enable the integration of applications, such as car sharing services and remote parking systems. The company also manufactures powertrain systems, including electric powertrain systems for the electric cars; products that enable the automation of transmissions to reduce fuel consumption and enhance driving comfort; and clean engines for vehicles. In addition, it designs and manufactures systems, modules, and components to optimize thermal management of vehicles and passenger comfort in the cabin. Further, the company designs and produces lighting and wiper systems for drivers in all weather conditions. In addition, it offers original equipment spares to auto manufacturers and the independent aftermarket; replacement parts and accessories for passenger cars and commercial vehicles; air conditioning systems for buses; cabin 3D image processing software; hydraulic actuators; and torque converters. Valeo SA was founded in 1923 and is headquartered in Paris, France.
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